At this year’s Peter Drucker Forum, I was confronted with a pivotal question: Does digital transformation genuinely make organizations flexible? 

My candid response: Nowhere near the mark.

In the rapidly evolving digital landscape of the past decade, executives have grappled with a common dilemma: How do I digitally transform my business? The term ‘digital transformation’ became synonymous with big budgets and high-risk, multi-year programs, primarily focused on implementing new technologies. However, often lacking was sufficient emphasis on delivering the flexibilities necessary to succeed in the ever-changing business world.

Flexibility for an organization can manifest in various ways. It aspires to be swift – quick to launch new products, adaptable in response to customer feedback, and capable of swiftly entering new markets. It seeks a resilient supply chain that can cope with demand fluctuations. It also aims to facilitate seamless collaboration among employees across different locations, breaking down organizational silos. Assessing our flexibility, the pandemic has shown how resilient businesses have been, while decreasing corporate longevity on the S&P 500 Index serves as a testament to their relevance for their customers.

Fast forward to the present, where, with everything changing at the same time, escalating complexity, and a pace of change that can only go up, it is imperative to critically re-assess the design of digital transformations.

Leveraging insights gained from hands-on experience in transformation initiatives, here are six rules to guide the re-design of your digital journey for enhanced flexibility:

1. OUTCOMES DRIVE WHAT GETS PRIORITIZED:
   There’s a common pitfall in transformative journeys: the measure of progress shifts from achieving outcomes to simply executing the plan and delivering outputs. This happens because those devising the strategy and those who execute it aren’t quite on the same page. Simultaneously, the world has become increasingly complex. To navigate this complexity successfully, it’s crucial to continuously steer the transformation based on the insights gained at every stage of execution.

This rule empowers organizations to consistently direct their efforts toward actions that lead to the desired outcome. Stay focused on the goal, but be prepared to adapt on the way.

2. TIME-BOX OUTCOMES:
   Humans are very good at expanding work to fill the time available for its completion. 

This rule introduces an explicit time constraint for achieving outcomes, no matter what. A commitment to demonstrating real value within 120 days not only speeds us up, but also sparks creative thinking to focus on what truly counts. This creates an environment in which organizations can constantly learn and adjust.

3. RE-IMAGINE THE WAY UNCERTAINTY IS MANAGED:
   Strategic decision-making is crucial for the success of any transformation, yet executives steering the process often hesitate in the face of inherent risks.

Imagine a company contemplating a shift in its product line to align with evolving market trends. Executives might well feel queasy – will customers respond positively? Are we addressing their most pressing needs? Will they be willing to stump up to pay for the proposed changes?

This rule dials down their discomfort by breaking down such decisions into micro-components, providing executives with incremental evidence and facts to underpin their choices, and minimize risk before expensive commitments are made. By reducing uncertainty at an early stage, such a structured approach enhances the chances of success.

4. ADOPTION BY DESIGN:
   Meaningful change happens when the solution created by a digital transformation is adopted by target customers. Take-up happens when the solution genuinely adds value from their point of view, meaning it must address problems that truly concern them. We often assume we understand their needs, but much of the time reality is quite different.

Placing people’s needs at the core, this rule enables you to continuously learn what really matters to customers and fosters an ongoing understanding of their evolving needs. The key is to establish a proactive strategy for driving adoption of the solution, recognizing that merely creating the solution isn’t sufficient.

5. INNOVATION-INFUSED TRANSFORMATION:
   Despite substantial investments in digital transformation, many organizations still lack readiness for the future. The issue often arises from treating innovation and transformation as distinct entities, assigning the sole responsibility for innovation to the innovation department rather than integrating it into the overall transformation.

This rule reshapes the approach, emphasizing the integration of innovation at the heart of transformation. It promotes a culture where creativity, adaptability, and forward thinking are inherent at every step of the ongoing change, helping organizations build a powerful competitive advantage.

6. BALANCED PORTFOLIO APPROACH:
   A common pitfall for many organizations is the tendency to lean heavily towards either efficiency or growth while shaping their transformations, even when the underlying landscape that delivers both remains the same. An excessive focus on efficiency may streamline operations but risks losing customers to competition, while an exclusive emphasis on growth might result in unsustainable cost levels.

This rule serves as a strategic compass, urging organizations to avoid the extremes and adopt a balanced portfolio approach. Embracing both offensive strategies for growth and defensive measures for efficiency, tailored to the organization’s risk appetite, ensures a dynamic equilibrium.

These rules, drawn from our practical experience of assisting customers with the TCS Pace^TM – Digital Innovation Factory, aid them in establishing a next-generation setup for digital transformation to deliver enhanced flexibility. This enables them to stay resilient and relevant in these uncertain times, making the transition from merely ‘doing’ digital to ‘being digital’, and transitioning them into a digital business that constantly adapts.

The future is exciting. Get comfortable with being uncomfortable and embrace the future with confidence.

About the author:

Lalit Karwa is Head, TCS PACE, Tata Consultancy Services, Europe, specializing in helping organizations respond to shifting customer needs and gain more value from their innovation and transformation investments.

The quest for innovation is great. Business leaders have the vision, drive and ambition to embrace technology. So why do innovation projects so often end in failure?

In times of economic downturn, performance improvement depends more than ever on innovative problem-solving. But how can companies overcome obstacles that block innovation and inhibit value creation? Surprisingly, the most important hurdle is recognising what they are up against in the first place.

Don’t develop solutions until you understand the problems

Some of the greatest minds ever known have given a lot of thought to problem-solving. Albert Einstein said: “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” 

It was this famous quote that framed our discussions on innovation and problem-solving at the recent Peter Drucker Forum in Vienna, Austria. This year, the event was held against a gloomy economic outlook. All of us in attendance – from business, academia and civil society – were looking to identify the fastest and least painful ways to navigate these difficult times.

When I reflect on the many sessions, there was one theme that ran across them all – the need to innovate.

But there was another common thread: almost everyone talking about innovation was struggling to deliver it.

All around the event, voices from Harvard, Stanford and the London Business School were saying the same thing. Something is not working, there’s a blockage in business that stifles innovation and the value creation it brings.

At Tata Consultancy Services (TCS), I have seen these blockages first hand in the organisations we partner with. Our experience of driving innovation agendas with our customers has revealed valuable insights into how to unlock the innovation journey to create exponential value.

Unlocking value through innovation

The first challenge is to identify what value really looks like for an organization. That always begins with the customer. To realise this value, ask which unmet or unarticulated need must be addressed for your customers, or the customers you want to reach.

Once you know what value looks like, the next steps will become clearer. Now search out the problems standing in your way of creating value. This kind of laser focus comes with a major advantage – it will help you discover which problems to tackle.

It’s important that innovation addresses the biggest problems standing in the way of creating value. Everything else can go on the back burner so that you keep the mission-critical list clear and focused. This takes us back to the Einstein quote earlier. Spend time identifying the right problems to solve. There’s nothing worse than throwing time and money at solving problems that won’t create value.

Overcoming the biggest innovation killer

Leaders are frequently frustrated with their organisation’s inability to deliver on innovation, but they often look in the wrong place to identify blockages.

A question I ask senior executives is: With the investments you have already committed to making, can you rate your confidence level in future-proofing your business?  In most cases, the responses are not encouraging.

Embedding innovation with future-forward thinking is not a default choice for most leaders. Innovation is not mainstream in most organisations. When innovation is not given priority, new ideas are more likely to be stifled by “corporate antibodies” – people and processes that shut down innovation in the same way our bodies shut down disease. Only by placing innovation at the core of the organisation will this major risk to its successful implementation be managed.

Short-term targets accelerate innovation 

A big bang approach to bring innovation mainstream is not recommended. Instead, begin the journey by having the right business problems assigned to hand-picked leaders. These leaders should be early adopters and entrepreneurial thinkers who will push hard to drive this change. Creating a time-constrained environment that triggers unconventional thinking to deliver value is also key for allowing organisations to accelerate this journey. We have seen extraordinary results when we set targets to deliver incremental value in 120-day cycles.

These initial successes will create the right foundation for building a culture of continuous innovation within your organisation, and for bringing innovation mainstream. Thinking big, starting small and moving fast is the only way to accelerate your speed of learning in this journey.

About the author:

Lalit Karwa, Head of TCS Pace, Europe

Lalit has over 20 years’ experience in building new capabilities for organizations keen to respond to shifting customer needs, helping them get more value from their innovation and transformation investments. As the Head of TCS Pace, Lalit puts an emphasis on solving business problems using technology enablers: through digital re-imagination/transformation, strategic planning, defining roadmaps and modelling the execution.